so just raise your hand, and they'll find you. here you go. why don't we start right here? and please introduce yourself. >> good morning, mr. president. welcome back to iowa. we're thrilled to have you back here. >> thank you, mary. it's great to be back. >> i have a 24-year-old son who campaigned fiercely for you and was very inspired by your message of hope. . .

this is pretty remarkable. most of us, in fact, i am just looking around the room. i think it is fair to say that nobody remembers the economy of the great depression, so the worst economy that we have gone through, maybe one, maybe one, maybe a couple, but you guys

look really good for your age. the 1981 recession, and this was worse than the three other recessions combined in terms of job loss and how it affected incomes, so that is going to have an effect on the entire generation. it means that they are worried about the future in a way that most of us were not worried. i think that this generation, the suns generation, they do not take things for granted.

i think they think about the community and other people. they do not have a narrow focus. i am very impressed with it. their future will be fine, but in the short term, what i say to them is, first of all, we are doing everything we can to make sure they can get the best education. one of the things that we did this year is we were able to change the student loan program of the federal government to save about $60 billion that is going to go directly to students in the form of higher grants, reduced loan burdens, bergen's when they get out of college.

so we are going to do everything we can to make sure they succeed. number two, we're going to make sure they have got the skills so they can find a job in this economy, and we have seen private sector job growth eight consecutive months now. the economy is growing. it is not growing as fast as we would like it, partly because there are some headwinds. the housing market is a big chunk of our economy. all of that excess inventory of houses that were billed during the housing bubble, they are getting absorbed, and slowly, that will start improving, said the expectation is that although we are not growing as fast as we can, we are making some good choices about providing small business tax breaks, helping to shore up the housing market, and over the next couple of years, you're going to see steadily the

economy improving, and if young people like your son are prepared, they're going to be able to find a good job. in the meantime, we have also done is make sure, for example, that your son can stay on your health insurance and to the age of 26 because of health-care reform, and that is going to release some of the stress that they are feeling right now. and then, finally, what i would tell your son is we are trying to make the tough decisions now so that by the time he has his own son or daughter, we are back to, number one, in research and development, back to no. 1 in the proportion of college graduates, back to number one in terms of innovation and entrepreneurship, that we are creating a competitive america

that will insure this 21st century is the american century just like the 20th century was. but it is going to take some time. in some ways, this generation may be less fixed on immediate gratification than our generation was, partly because they have seen some hardship in their own families and in their own careers. who is next? this gentleman right here. >> my name is bob. i lived about five or six blocks away, and we are really glad you came here, mr. president. >> it is not hard to come here. this is a nice neighborhood, so, yes, it is beautiful. >> now, my question relates to things halfway around the world and how they affect the economy, particularly the wars and the enormous amount of spending that has gone into that over the last decade, not just the last couple years. so this is what i'd ask.

those decade-long conflicts have had an enormous cost in terms of people killed and wounded -- our men and women, and other peoples who are killed -- and they've had a gigantic cost in terms of money and resources and people diverted to the war. when can we look forward to reducing the huge spending on these wars, and is it possible that kind of funds could help us square up our budget and give us crucial resources to strengthen our economy right here at home? >> well, i said at a speech i made at west point talking about afghanistan that i'm interested in nation-building here at home. that's the nation i want to build more than anything else. as you know, because it was a

big issue when i was campaigning here in iowa, i was opposed to the war in iraq from the start. i made a commitment that i would bring that war to a responsible end. we have now ended our combat mission in iraq and we've pulled out 100,000 troops out of iraq since i was in office. so that's a commitment we've followed up on. now, afghanistan was a war that most people right after 9/11 i think overwhelmingly understood was important and necessary. we had to go after those who had killed 3,000 americans. we had to make sure that al qaeda did not have a safe haven inside afghanistan to plan more attacks. and you can speculate as to whether if we hadn't gone into iraq, we had just stayed focused on afghanistan, whether by now we would have created a

stable situation and we would not have a significant presence there. but that's not what happened. and so when i walked in, what we had was a situation in afghanistan that had badly deteriorated over the course of seven years, and where the taliban was starting to take over half of the country again. you had a very weak afghan government. and in the border region between afghanistan and pakistan, you had al qaeda still plotting to attack the united states. now, i had said during the campaign we need to make sure that we're getting afghanistan right. and what i committed to when i came into office was we'll put additional resources, meaning troops and money on the civilian side, to train up afghan forces, make sure that the afghan government can provide basic services to its people. but what i also said is we're not going to do it in an open- ended way.

we're going to have a time frame within which afghans start having to take more responsibility for their own country. and i said that on july of next year, we're going to begin a transition of shifting from u.s. troops to afghan troops in many of these areas. now, the situation there is very tough. afghanistan is the second- poorest country in the world. there are a lot of countries in the world. this is the second poorest. it has a 70% illiteracy rate. afghanistan was much less developed than iraq was. and it had no significant traditions of a strong central government that could provide services to its people, or a civil service, or -- just the basic infrastructure of a modern nation state. itwe're not going to get

perfect there. it is messy, it is hard, and the toughest job i have is when i deploy young men and women into a war theater because some of them don't come back, and i'm the one who signs those letters to family members offering condolences for the enormous sacrifice of their loved ones. but i do think that what we are seeing is the possibility of training up afghan forces more effectively, keeping pressure on al qaeda so that they're not able to launch big attacks, and that over the next several years as we start phasing down, those folks start lifting up. here's the impact it will have on our budget. there are going to be still some hangover costs from these

two wars -- the most obvious one being veterans, which we haven't always taken care of as well as we should have, and i've had to ramp up veterans spending significantly because i think that's a sacred trust. they've served us well, we've got to serve them well. and that means services for post-traumatic stress disorder, reducing backlogs in terms of them getting disability claims, help specifically for women veterans who are much more in the line of fire now than they'd ever been before. all those things cost some money. so even as we start winding down the war in afghanistan, it's not as if there's going to be a huge peace dividend right away. but what it does mean is we'll be able to more responsibly manage our military budget, and

this is another example of where you can't say you want to balance the budget and not take on reform in the pentagon. i mean, we've already pushed hard to eliminate some weapons programs in the pentagon budget that the generals, the people who actually do the fighting, say we don't need. but getting those programs shut down is very difficult because typically there's not a single weapons program out there that doesn't have some part being built in 40 different congressional districts in 10 or 20 different states so that everybody has a political vested interest in keeping it going. and bob gates, my defense secretary, has been really good about pushing hard on that. and we've won some battles, but that's going to be an area that we're going to have to take a serious look at as well when we put forward a plan for getting a handle on our long-term debt and deficits. ok? all right, i'm going to go boy, girl, boy, girl, just to make sure everybody knows i'm fair

here. right here. >> hi. my mother lives with my husband and i. we take care of her. she's been with us for six years now. she is currently in a nursing home getting rehab. >> right. >> i have great concerns over your health bill. one of the ladies in admissions over there whom i was talking with the other week, started -- she's from england, and her family is still in england. >> right. >> and she was explaining to us how -- telling us what we had to look forward to here. her sister worked as a nurse in the same hospital for 20 years. she was 55. she was told she needed open- heart surgery.

she was put on a 10-year waiting list. three years later, she had a major heart attack and they were forced to give her that surgery that she needed. i realize you're saying the 26- year-olds will have health insurance -- they don't have to worry about that. my mother always told me the older you get, the faster time goes. and when she said that to me years back, i thought she was crazy. >> yes, i've noticed this, too. >> yes, and these 26-year-olds in a heartbeat are going to be 50, 55. when you're young, you're supposed to be able to work hard for what you want. you build up your income. you further yourself so you can retire and have peace of mind. it's hard to -- i can't fathom now how can you be excited in

your youth when you have to save, save, save just to protect yourself health insurance-wise when you reach our age. >> let me ask you a question, though. i mean, because you said you're worried about my health reform bill, and the nurse said, here's what you have to look forward to. is your mom on medicare? >> yes. >> so there's nothing in our health reform bill that is going to impact whether your mom can get heart surgery if she needed it. we didn't change the core medicare program. so unless there's something specific that you're worried about -- >> medicare doesn't start until you're 65. >> no, no, i understand. >> i'm talking about 50, 55 years old. >> all right, so if you're not on medicare -- >> yes, right. >> and do you have health

insurance? >> yes. right now, yes. >> so there's nothing in the bill that says you have to change the health insurance that you've got right now. i just want to identify what your worry is, because i want to say you shouldn't be worried about it. but what is it that you think might happen to your health insurance as a consequence of health care reform? >> ok, what i'm concerned about is say if my -- just say if my husband got laid off. say we had no health care. >> you had no health insurance, ok? now, right now before reform, if you had no health insurance, you'd just be out of luck, ok? >> and then we'd get the government-run health insurance, right? is that what you're saying? >> no, here's the way it would work. so let me just kind of map it out for you. if you are already getting

health insurance on your job, then that doesn't change. health insurance reform was passed six months ago. i don't know if anybody here has gotten a letter from their employer saying you now have to go into government-run health care because we can't provide you health insurance anymore. i mean, that hasn't happened, right? so you're keeping the health insurance that you had through your job. and the majority of people still get health insurance through your job. the only changes we've made on people's health insurance who already have it was to make it a little more secure by saying there are certain things insurance companies can't do -- a patient's bill of rights, basically. so insurance companies can no longer drop your coverage when

you get sick, which was happening. sometimes there were some insurance companies who were going through your policy when you got sick to see if you had filled out the form wrong, you hadn't listed some infection that they might call a preexisting condition, et cetera -- a bunch of fine print that led to people not having health insurance. so that was one thing that we said. we said also you can keep kids on your health insurance till they're 26, that children with preexisting conditions had to be covered under health insurance. so there were a handful of things that we said insurance companies have to do, just as good business practices to protect consumers. but otherwise you can stay on your employer's health care.

so that's if you have health insurance. the other thing that we did was we said if you're a lot of people who don't have health insurance, it's because they work for small businesses, who have trouble affording health insurance, because they're not part of a big pool -- they're not like a big company that has thousands of employees and they can negotiate because the insurance companies really want their business -- so what we said was let's provide tax breaks to small businesses so they can -- they're more likely to buy health insurance for their employees. and right now about 4 million businesses across the country are now getting a tax break, a tax credit, if they provide health insurance for their employees, that can save them tens of thousands of dollars. so that's the second thing. and the third thing we said was, okay, if you don't have health insurance -- let's just say your job doesn't offer you health insurance, or you lose your job -- then what we're going to set up is what's called an exchange, which is basically a big pool -- you become part of this big group of people, just like as if you were working for a big company or a big university like drake. you become part of this pool, and you'll be able to buy your own insurance through this pool, but the rates will be lower and you'll get a better deal because you've got the bargaining power of these thousands or millions of people who you're buying it with.

you'll still have a choice of plans. you'll have a choice of bluecross or you'll have a choice of this plan or that plan, but you'll be buying it through a pool. and if you can't afford it, then we'll provide you some subsidies to see if we can help you buy it, so make it affordable. so that's essentially what health reform is about. now, what that means is, is that you're not going to be forced to buy a "government-run" health care plan. the only thing that we have said is, is that if you can afford to get health care and you're not getting health care, well, that's a problem because that means when you get sick and you have to go the emergency room, everybody else here has to pay for it. and that's not fair. so we've said if you can afford to get health care, we're going to make sure that you can afford it, but you've got to have some basic coverage so that we're not subsidizing -- everybody else isn't paying an extra

thousand dollars on their premiums to cover you. >> all right. we're all -- we all agree health -- there needs to be health reform, ok? we just moved out here a year ago from las vegas, ok? there are illegal immigrants that are getting free health care right now, ok? the doctor that we had, clinics and stuff, closed up because they couldn't even afford to stay open because of all the illegal immigrants that were getting health care. >> well, let me do this because -- i'll answer this question and then i want to make sure everybody else gets a chance, too. but the -- no, i think this is important for me to be able to clear up some stuff. there's no doubt that there are probably a number of hospitals in every major city, doctors in every major city, who are

providing uncompensated care to a whole lot of people, including some illegal immigrants. basically most doctors and nurses that i meet, their whole reason for being in the profession is to help people. and so if they see somebody coming into the emergency room, if there's some child who is badly injured or sick, they're going to not check on their immigrant status, they're going to say this is somebody who needs help. and i think that's the right thing to do for our society generally. i don't -- i think it is very important for us to make sure that we have compassion as part of our national character.

now, the thing i want to point out, though, is, is that, first of all, there's nothing in my health care plan that covers undocumented workers, right? so that's not part of health reform. and the second thing is, it turns out actually illegal immigrants probably under- utilize the health care system. the only time they go to the health care system is if they have an emergency, because for the most part they're worried about getting caught. so that's not to say that there's not a portion of that population that is getting uncompensated care that's adding to our costs. but there are a lot more americans who don't have health insurance, as a consequence don't get regular checkups, aren't getting preventive care, are more likely to end up in the emergency room, are more likely to add to the cost of the hospitals or the doctors. and so if we can provide them with basic checkups, basic preventive care, affordable health care so they've got some

peace of mind, that will actually over time make the system more efficient as a whole, because emergency room care is the most expensive kind of care. but i guess the main message i just want to communicate -- because there was a lot of misinformation during the health care debate -- i just want to communicate that if you're happy with what you've got, nobody is changing it. and you and your mom are going to be able to have -- your mom is going to have her medicare and -- the core benefits of medicare aren't changing. and if you've got health care through your employer, that's not going to change, except to make it a little bit safer and more secure. if you don't have health care,

then it's just going to help. and overall, independent estimates say that this is not going to add to our deficit, it's actually going to reduce our deficit because we're making the health care system more efficient over time. but i understand why people are concerned, because this is a very personal thing, and nothing is scarier than when you don't have health care and you're sick. i've told the story of when sasha was three months old, she got meningitis. and i still remember going to the hospital. and she had to get a spinal tap, and i never felt so helpless and scared in my life. and i was lucky to have health insurance, but we were in the emergency room looking around and thinking, well, what if i was one of these other parents who didn't have it and my daughter was going through this. and i was thinking i'm going to get a $20,000 or $30,000 bill after this and i have no way of paying for it. or what if my child has a chronic illness? and so it's not just a one-time trip, but it's trip after trip.

and i don't think any parent should have to go through that, not in a society as rich as ours, so -- but thank you for the question. it's helpful. yes, sir. got a mic right behind you. >> president obama, first, thanks for allowing us the opportunity to meet with you here in iowa. >> you bet. >> especially since i'm a drake graduate, i'm especially thrilled to be here -- it's like testing my education, my graduate degree at least. anyways, i moved here from chicago about 30 years ago. >> you still got a little -- >> it's a nice town. >> you still got a little chicago in you. >> yes, it's still going to be there. i won't argue with you on anything. but i think the reason i stayed here was it was a wonderful place to start a business. i got a master's here and i started a small business with $200 and a big dream. and i was 25 years old. i'm 53 now. years.en in business 28 we went from what was myself to now almost 100 and some employees and about 200,000 square foot of manufacturing. >> that's -- what kind of business is it? >> we manufacture promotional

products, and we actually make those bag signs you see in all the political yards. >> right, right. >> we do all the printed t- shirts for every juvenile diabetes walk. >> that's great. >> and the beauty of my background is i actually came from a medical background. my father, my father-in-law, my brother, my brother-in-law -- everybody is a doctor, all in chicago. so i was supposed to be a doctor, but i came here and i said, well, you know, i sort of like business, i like making deals. so we got started in business, and we started out as an ad agency. and i guess as we got into it, we realized that the key thing is to have a product to sell so you could sell truckloads of something rather than just sell one thing at a time. and so we did wholesale the way most people would like to do wholesale. and part of that meant importing, it meant trips to china 25 years ago, and it meant 25 years of growing the business.

i always hear -- i'm never confrontational, i'm sure everybody here will tell you that -- but i always hear that we're trying not to tax anybody but the people that make over that $250,000, that elitist 2%. any viable, strong competitive business -- and the name of our business is "competitive edge," 30 years ago, before cnn ever used it as a term -- the hope is that you're supposed to grow profitability so you can grow your business. then i went in as a young man of 25 and said, "how about a bank loan?" there was a bank right across the street, and they really weren't interested in myself unless i was buying a boat or a car and i was going to make payments. they didn't understand the business. twenty-five years go by very quickly, unfortunately, and you find yourself looking around, proud of what you've built, but at the same time realizing there are new threats that besides what unfortunately you have to deal with on your plate, on a macro level, which is mindboggling, we each have our own little niche. we also pay that health insurance for our employees. always did.

i remember paying for an employee who said, "what are my benefits?" i said, you're going to get health insurance, you're going to get a profit-sharing possibility here, you're going to be able to grow with us. and the goal was, lock up the person, because you don't want people changing jobs. that insurance for that individual was $32 -- $32 a month, and i more than happily picked that up. today that amount is like $500. they don't even get the same level of service. they get all generics, they don't get the products, they don't get anything. i guess what my commentary comes down to is, as the government gets more and more involved in business and gets more involved in taxes to pay for an awful lot of programs, what you're finding is you're strangling those job-creation vehicles that are available -- you're sort of strangling the engine that does create the jobs. we have jobs that we offer, i mean, regularly. there's always an opportunity for somebody that wants to work

hard. i don't care what the background is. i don't care what the health level, what the education is, or where they came from. but the fundamentals are profit. $250,000 -- well, if you're two people and a family, that's not a lot. it seems like a lot, but not when you have the family, the kids, the cars, the college, and all the other things that go -- plus you have to grow the engine. you have to grow it to continue to provide more jobs and to create the dream. yes, there's a lot of wealth, but it's trapped in the buildings, the 200,000 square feet. it's trapped in millions of dollars in inventory. it's trapped in accounts receivable, which can run millions of dollars. people that are saying, you know, i don't have it right now, i can't pay yet -- but the government comes along every quarter and the tax checks do go out on imaginary profits that you hope you won't write off as bad debts a year later, on things that really from my perspective are the thrills of owning a small business, you

know, having the whole plate on a micro level that you would have and having to constantly keep the balls in the air. one of the things that concerns me is that repeal the bush "tax cuts." the repeal, i don't care if it's 5% -- that's 5% that would create a job. 5% on millions of dollars of profit creates many jobs. nobody is putting it in their pocket on a corporate level. they can sit with their piles of cash. but on a small business level, which is the essence of this country and it is the foreign ambassador for countries around the world to meet us, when i go to china and i spend all my time, i have a one-on-one relationship. i sent an email out to all the people we do business with and i go, do you have any questions for our president? if i'm blessed and i have the opportunity to spend the four hours under the trees, i'd like to present your arguments. first one was, from china, why are you pressuring them for the renminbi? why are you pressuring --

>> all right, we're going way afield now. i mean, the -- so let me focus on your question -- >> -- the job creation -- >> -- and i'll be happy to talk about it. and then if you want i can tell you, if you're making an argument on behalf of china about their currency, i'm happy to make that argument -- to push back on that. but let me focus on the issue you raised about your business. and first of all, i'm thrilled that you've been able to build this success. i have signed eight small business tax cuts since i came into office. and the package that we signed this week cut taxes in eight more ways. so your taxes haven't gone up in

this administration. your taxes have gone down in this administration. so i just want to be clear about this, because this is something that i know a lot of times there's -- i just think the notion that, well, he's a democrat, so your taxes must have gone up -- well, that's just not true. taxes have gone down for you, the small businessperson and, by the way, for 95% of working families. that was part of the recovery act was reducing people's taxes. now, with respect to the debate that's now taking place on the bush tax cuts, keep in mind that what we've proposed is to extend the bush tax cuts for all income up to $250,000. so it's not just sort of the person who is making $60,000 who would get a tax break or who is making $100,000 who would make a tax break -- who would get a tax break. if you're making $300,000, you'd still get a tax break on the

first $250,000 worth of income. you'd pay a slightly higher rate on the $50,000 above that. if you make half a million dollars, you'd still be having tax relief on the first half of your income. on the other half above $250,000, you'd have a slightly higher rate -- a rate, by the way, that is back to the level it was under bill clinton, at a time when there were a lot of small businesses and, in fact, the economy was doing much better. the reason i think it's important for us to do this is not because i'm not sympathetic to small businesses. it has to do with the fact that 98% -- 98% of small businesses actually have a profit of less than $250,000. so it's not just individuals who generally don't make that much

money, most small businesses don't make that much money, either. but it costs $700 billion. and so i've got to figure out, well, how do i pay for $700 billion? because everybody is also concerned that our deficit is out of control. so then folks will say, well, let's cut government spending. well, most government spending is medicare, medicaid, veterans funding, defense. when people look at the budget a lot of times they say, well, why don't you just cut out foreign aid, for example? foreign aid is 1% of our budget -- not 25%, it's 1%. people say, well, why don't you eliminate all those earmarks, all those pork projects that members of congress are getting out there? now, i actually think that a lot of that stuff needs to end, but even if i eliminated every single earmark, pork project by members of congress, that's 1% of the budget.

so finding $700 billion is not easy. and when we borrow $700 billion, we're adding to our deficit and debt, and then we've got to pay interest to china or whoever else is willing to buy our debt. so these are the choices -- so it's not that when it comes to small businesses, or big businesses, that i have any interest in raising taxes. i'd like to keep taxes low so that you can create more jobs. but i also have to make sure that we are paying our bills and that we're not adding -- putting off debt for the future generation. and that's what happened in the bush tax cuts in 2001 and 2003. we lopped off taxes, and we did not pay for it. and that is the single largest contributor to the debt and the deficit. it's not anything that we did last year in emergency spending.

it's not the auto bailout. it's not the health care bill. that's not what's added to our deficit. the single biggest reason that we went from a surplus under bill clinton to a deficit of record levels when i walked into office had to do with these bush tax cuts, because they weren't paid for and we didn't cut anything to match them up. so i think that to say to the top 2% of businesses -- which, by the way, includes hedge fund managers who have set up an s corporation but are pulling down a billion dollars a year but they're still considered a small business under the criteria that are set up there, that to say to them, you've got to pay a modestly higher amount to help make sure that our budget over time gets balanced -- i think that's a fair thing

to do. and i think -- when i talk to a lot of businesses, they just don't want super high rates of the sort that existed before ronald reagan came into office. and i'm very sympathetic to that. and on capital gains and dividends, for example, we want to keep those relatively level. we don't want -- i would like to see a lower corporate tax rate. but the way to do that is to eliminate all the loopholes, because right now on paper we've got a high corporate tax rate. but in terms of what people actually pay, they've got so many loopholes that they've larded up in the tax code, that effectively they pay very low rates.

so this is a challenge. but i want to do everything i can to make sure that your business succeeds. i will say the reason that i'm pushing china about their currency is because their currency is undervalued. and that effectively means that goods that they sell here cost about 10% less and goods that we try to sell there cost about 10% -- let me not say 10%, because i don't want the financial markets to think i've got a particular -- there is a range of estimates. but i think people generally think that they are managing their currency in ways that make our goods more expensive to sell and their goods cheaper to sell here. and that contributes -- that's not the main reason for our trade imbalance, but it's a contributing factor to our trade imbalance. all right. over here. >>thank you. good morning, mr. president. >> good morning. >> i'm a proud iowa social worker who works with crime victims. and my question is about the

poverty rate. we currently have a rate of 14% poverty. that's one out of seven people are in poverty. and i believe that that's the highest rate since the 1960's. and there's a lot of reasons why people go into poverty who weren't in poverty before, things like medical emergencies and losing jobs, being a crime victim and, especially for women, a divorce. my question is, what are we going to do -- i guess, more specifically, what are you going to do -- to help one out of six or seven people get out of poverty? >> it's a profound question. the poverty rate i think is the highest it's been in 15 years. it's still significantly lower than it was back in the 1960's,

but it's -- look, it's unacceptably high. the single most important thing i can do to drive the poverty rate down is to grow the economy. what has really increased poverty is folks losing their jobs and being much more vulnerable. so everything we can do to provide tax breaks for small businesses that are starting up, to make sure that we are encouraging -- for example, trying to accelerate investment in plants and equipment this year, and letting people write it off more quickly so that companies that are on the sidelines that are thinking about investing, they say, you know what, why don't we go ahead and take the plunge now

and start hiring now, instead of later -- all that can make a big difference in terms of growing the economy, reducing the unemployment rate. that'll reduce the poverty rate. the second most powerful thing i can do to reduce the poverty rate is improve our education system because the single biggest indicator of poverty is whether or not you graduated from high school and you're able to get some sort of post- secondary education. and right now too many of our schools are failing. so this week we spent a lot of time talking about the education reforms we've already initiated. as i said, we set up something called race to the top. and it was a simple idea. the federal government sends

education dollars to schools all across the country to help them, particularly poorer schools. but what we said is we're going to take a portion of that money -- $4 billion -- and we're going to say to the states, you're going to have a competition for this money. you're not automatically going to get it because of some formula. you've got to show us that you are initiating reforms that are going to recruit better teachers and train them more effectively, that are going to have greater accountability measures so you're able to track how students are doing during the course of the school year and make adjustments so that they're not just being passed along from grade to grade even though they can't read or do arithmetic at their grade level. we're going to encourage more charter schools and more experiments in learning across the country. all these reform efforts that we triggered through this competition have meant that 32 states actually changed their

laws. it's probably the biggest set of reforms that we've seen nationwide on public education in a generation. then what we're trying to do is make sure that we're working with community colleges and ensuring that they are providing a great pathway for young people who do graduate from high school. they may not go to four-year colleges right away, but the community college system can be just a terrific gateway for folks to get skills. some start at a community college and then go on to four- year colleges. some just get technical training, get a job and then come back maybe five years later to upgrade their skills or adapt them to a new business. so we're putting a lot of resources and effort into making sure that community colleges are constantly improving, and they're adapting their curriculum to the jobs of the future. so education and growing the economy generally, those are the most important things i can do for poverty. now, there are other things like, for example, health reform so that people don't lose their homes if they get sick that will help keep people out of poverty, making sure that we're

dealing with domestic violence, which can have an impact on women that then drives them out of homes and puts them into difficult situations, dealing with our veterans so that if they've got post-traumatic stress disorder, we are treating them quickly before it compounds itself and eventually they end up on the streets and it's very hard for them then to get back on their feet. those are all things that are important, and we're going to keep on doing them. but if we can grow this economy and improve our education system, that's going to be the most important thing we can do. i'm getting the signal -- one more question. ok. thegoing to have to call on guy with the collar. what can i do? youdn't mean to outrank here, but -- >> sorry, matt.

mr. president, father michael amadeo, pastor of holy trinity catholic church here in beaverdale, as well as the school that in 2008 was recipient of the department of education's blue ribbon award. >> congratulations. congratulations. >> so thank you for being here. >> congratulations. >> secondly, thank you for your leadership. these are very tough economic times, tough times for our country, in regards to men and women being deployed. my question for you comes from a member of my congregation who is 55 years of age, has a wife, two children who are freshmen in high school. a year ago he lost his job in manufacturing. he's been unemployed now for a year plus. what will your economic policies

do for him within the next year, and hopefully to be able to secure a job and have that american dream again, which has now been lost? >> well, obviously that story is duplicated all across the country, and i get letters -- i get about 40,000 letters or emails from constituents across the country every single day. and my staff selects out about 10 of them for me to read each night, sort of a representative sampling. i know this is a representative sampling because about half the letters call me an idiot -- so they're not screening them out. but a bunch of those letters talk about "i'm 50 years old, i've worked hard all my life, i've looked after my family, the plant closed, or the office shut down, and it's very hard for me now to find work.

the jobs that are available pay 20%, 30% less than what i was making before." sometimes the parents write about them feeling ashamed that they can't provide for their kids the way they wanted to. sometimes i get letters from kids who aren't at all ashamed of their parents. they love their parents. they're proud of them. but they know that their parents are feeling bad. and so they write to me saying, "i wish you could just do something, because my dad or my mom, they look like they're losing hope and they're lost, and i feel bad." so what you're hearing is what a lot of folks are going through all across the country. and i think -- i've spoken

generally about what we can do long term for our economic competitiveness. there are some things that we're doing immediately to try to improve the business climate. so as i already mentioned, trying to get businesses who actually have a lot of cash -- they're making profits now -- to invest those profits now as opposed to sitting on the sidelines or holding them. and in plants and equipment and research and development, we're trying to change sort of the incentive structures and the tax codes to spur on additional business investment. if the member of your congregation, your parishioner, was in manufacturing, one of the things that we think holds a lot of promise is the whole clean energy sector, because some of the manufacturing jobs that have been lost just won't come back, partly because

manufacturing has become much more efficient. i mean, a lot of people think that the reason manufacturing has gone down so fast is because all these jobs have been shipped overseas. well, that's a contributing factor. there's no doubt china took a lot of our manufacturing jobs, prior to that, mexico. next will be vietnam or malaysia or other countries, just because their wages are much lower. but -- and frankly, it's also because sometimes our trade deals weren't enforced very well. and one of the things that i'm saying is i believe in free trade. i think that it can grow our economy. we already heard from a businessman who is involved in

international trade. but i think it is very important to make sure that trade is fair and that each side is being treated equally. and right now, that's not always the case. but it turns out that a lot of manufacturing has declined, just because it's gotten so much more efficient. you go into a steel plant now that used to take 10 folks to put out one unit of steel, now you need one person with a computer. when you go into just about any manufacturing plant these days, so much of it is automated. you've got these robot arms and it's all clean and pristine and it's just -- it's a different type of industry now. so that's where a lot of jobs have been lost.

but here's the good news. the clean energy sector i think is going to be a huge growth sector. and what we did during the recovery act was we invested in companies, including companies here in iowa. i was out at a wind farm -- where was that? out in fort madison, siemens -- where you go here and what was just a shut-down factory, they've reopened. they're building the blades for these massive windmills. and they had just hired several hundred people and were looking at hiring several hundred more because they are seeing some certainty in the renewable energy industry. and so they had actually hired a lot of folks who were coming off traditional manufacturing industries, applying their new skills to these new jobs. the same is happening in advanced battery manufacturing. i don't know how many people here have a hybrid car -- you've got a couple of folks. it turns out that we weren't making the batteries that are going into these hybrid and

electric cars, they were all being made elsewhere. we had about 2% of the market. so as part of the recovery act what we said was, let's invest in creating our own homegrown advanced battery manufacturing. and we're on track now by 2015 to have 40% of the market. and we were in michigan, looking at one of these plants. a lot of the folks who were there are folks who used to work as suppliers for the auto industry. they had gotten laid off, and now they're back helping to build what will be the cars of the future.

these advanced batteries that they're building are going into the chevy volt, which is a american-built clean energy car, a car of the future. so there are still going to be opportunities for skilled tradesmen, people who've worked in manufacturing, but it's not going to be in just these massive factories of the 1950's. it's going to be in these new factories focusing on new industries, and this is where innovation and research and development is so important. the one thing that's going to happen, though, is, is that parishioner is going to need probably to update some of their skills, because as i said, the fact that they know manufacturing, they know machines and tools -- all that is going to be helpful, but they're also probably going to need to work a computer better. they're going to need to know how to diagnose a big, complicated system, looking at a flat screen inside the factory

as opposed to tooling around and opening things up to see what's going on. and that may require some retraining. and that's again why the community college system can be so important. a lot of folks at the age of 50, they don't need two years of education, but they may need six months where they're able to retool and get some help paying the bills and making the mortgage while they are retooling. and those are the kinds of programs that i think we need to set up. well, listen, this has been terrific. i am so grateful to all of you for taking the time to be here. as i listen to the questions, it's a good reminder we've got a long way to go. but i do want everybody to feel encouraged about our future. this goes to the first question that was asked about the next generation. america is still the wealthiest country on earth. we have the best colleges and

universities on earth. it still has the most dynamic entrepreneurial culture on earth. we've got the most productive workers of just about any advanced nation. we still have huge advantages, and people -- billions of people around the world would still love the chance to be here. and so i don't want anybody to forget that we've been through tougher times before, and we're going to get through these times. but typically, when we've gotten through tough times, it's because we all buckled down and we refocused and we came together and we made some tough but necessary adjustments and changes in how we approach the future. and i'm confident we're going to

do that again. but it's going to happen not just because of me, the president. it's going to happen because of individual small businesses. it's going to happen because of what's happening in congregations. it's going to happen because of what young people are doing -- thinking about their future and how they're applying themselves to their studies. all of us are going to have to be pulling together and refocusing on the future and not just the present. if we do that, we're going to do fine. so thank you very much, everybody. appreciate it. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute]

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i look forward to answering your questions. thank you. >> general, thank you very much. i have spent a great deal of time and effort over a period of years. pursuing jointnes. i was in on the ground floor, 1982. an effort begun by richard white of texas. my first bill abolished the joint chief's of staff and i found none of them had a sense of humor but the house passed on three different occasions, legislation to create jointn se

s&p ess with barry gold water and the able stance assistance of bill nickels. it was called gold water, nickels that created in fact, jointn ses. now it took some time for the joint culture to come about, but it did. services saluted and did well. and i to this day, wish to compliment all those present and past who helped create the jointness.

my first question. joint forces command is a subject of elimination. if that comes to pass, who within the department will have that's it's central mission? the job advocate, develop and joint operating concepts. doctrine and training. will we be throwing away all the efforts that began with gold water nickels, should that happen? i'm very concerned that or about where that will go, how much thought has gone into that and will our military be better off as a result? but answer the first question, secretary lynn, who assumed that

duty? >> thank you mr. chairman, we too recognize the importance of jointness for the training, doctrine and in our operations and appreciate the role you played gold water, nickels and the subsequent events. as you indicated, those efforts have been successful in changing the whole culture of the department. the operations are different than what they were during the first gulf war when jointness was not adequate. services are different than in the 70's and 80's and the actions that led to the gold water, nickels. legislation. we do think that since the department is in a different place, that is it possible to eliminate the joint forces command. to eliminate this four star billion dollar headquarters but

retain the culture of jointness. you asked where the leadership will come from? the joint staff and now the services and the coalk o ms themselves because of the efforts of gold water, nickels and the joint forces command. the joint doctrine training and operations are will -- continue to be a strong part of the department. >> where does it go again? >> as i said, the leadership in terms of training and doctrine, so much of it will come from the joint chief's and the joint staff, but the place that we're in is fundamentally different than the 70's through the 90's. we have a much stronger joint culture inside the military departments and services

themselves and combatant commands that operate jointly and have an e those of how they operate. >> thus far we have not received the information. mr. secretary, when will the information be forthcoming? >> mr. chairman, we provided i think briefings to the staff and - no, i'm not talking about briefings. i'm talking about information. pieces of paper. >> pieces of paper? we have provided extensive legal opinion top braecht legislation and will continue to answer the

committees questions and provide documentation and material the committee needs as the task force moves into the implementation phase there will be much more material available for the committee. >> have you provided everything for which we have asked? >> i'm not sure the committee would agree with that we've been trying to be responsive as possible and will continue to do so. if there's specific information we need, i'm happy to follow up for the record. >> for the record, i would like to receive the copy of the memorandum of the joints chief's of staff and proevaluation, joint command establishment working group. i would like to have a copy of that piece of information, please? mr. mckean? >> thank you, mr. chairman. as i eludeed the opening

statement it's critical the department provide this committee with as much information as possible. where cuts will come from. where reinvestment will occur in impact of current and future operations. this is no more true than in the case of proposed closure of u.s. joint forces command. the stand up for collie sure of a combatant command deserves scrutiny in the department and a dig significant change for the workforce. on august tenth during a brief together house staff and members by secretary hail and other senior leaders. several documents were requested regarding closure of jif con. by the end of the month no information. i want to be even more specific to ask for this. on august 31, i along with four

sent along a letter with gates requesting the same information. we finally received a reply. i want to thanks secretary gates for responding and you in any role you might have played providing additional information. however, was not only was the response tardy but incomplete. my colleagues and i requested the d od general and legal counsel about the a politic built of the braecht law and a copy and an analysis provided by senior staff for the secretary of defense regarding closure of u.s. jif-come. any business case analysis conducted related to the initiative, finally terms of reference provided to task force charged with implementing closure of u.s. jif-con.

we received the term of reference for the task force but not the senior staffs analysis or any business case analysis. secretary lynn, will the department immediately provide the committee with the requests materials? >> mr. mckee on. let me address that. the decision to recommend disestablishment was not based on a business base but a military rational. it was based on a review of the uniform command plan and the central purposes were. the provision of forces. joint training and doctrine. joint experimentation. after 30 meetings on those subjects with senior military leaders and senior civilian advisors the secretary concluded those no longer have a four star

command and he so recommended to the president. it was a military rational that caused secretary to recognize the disestablishment of the forces command. not a business case. >> so there was nothing regarding any business was involved in the decision? >> the secretary looked at the growth of the joint forces command. it tripped over the last decade with no fundamental change in it's mission and that caused him to look at that military rational and we're now engage in the review center by center. function by function as to which centers and which functions need to be retained and where they would be retained. in that review, the result office which we'll provide to the committee of course. we're looking at the - may i ask, when? >> as we develop the course of action and recommendations, be over the course of the fall.

>> i think probably one of the problems of committee or at least myself is having, is - the things we've asked for is incomplete and we can't get an answer as to when we'll get the things we've asked for and then you tell us that you've made decisions and your moving forward like we have no say whatsoever or no way to deal with this. and it leaves us somewhat frustrated. i think you can see from the chairman and myself the questions we have. i'm nopt saying that we're against this. it's just that we haven't seen the rational or the total - we don't understand totally the why and the where for? and we still have questions

about that and when i ask when or if you'll give us this information, what's the response? we start - you start talking about that it's not a business decision but a military decision. okay so you made no business analysis? is that what i understand? >> no. what i'm saying is that there was a military rational. i tried in my testimony to summarize that rational and we'll try - i understand - i'm trying say on the issues of the butts and how much savings there will be in a business case, that's being developed now. we think we'll be able to save a substantial part of the billion dollars. we have not developed all of the recommendations that lead to savings but the rational that caused the secretary to recommend this establishment.

the second phase is to review which pieces stay and which go and what the net result in terms of savings are when you say business case i think that's what you want. saying that this is under way now and we'll provide it to the committee. >> okay. what you said is you made no business decision and you think as time goes on you will look for savings and that's what we're talking about with business information on it? i'm trying i guess to understand that's where your going? i'm not too articulate but some of the things we're asking, let me go back down to eventually we'll get something about the business analysis. what about the military rational document? can we get that? >> well, we think we've answered that question in the testimony and the briefings in

the material and the legal opinion, but i will go back to the department and see if there's more or a fuller explanation we can provide if the committee think it's requiring it. >> this committee, mr. secretary is the most sportive of the military in congress and we're not trying to be - we just need to understand more fully where your coming from. there's a lot of rational to eliminate it your see saying. the chairman said who will take over the responsibility of jointn sed and you said i guess we don't need it anymore. we need to understand that. more completely.

let me ask another question. in is - i share the secretary's concern the growth and department's top line is in sufficient don't request those provided by the military. one percent real growth is a net cut for investment and procurement accounts. this is not just my view. independent panel appointed by congress recognizes this fact. the co-chair of that panel. bill perry under president clinton and steve hadly the national security advisor under george w. bush echoed the concerns of many on the committee. they're report rightly states our nation is not afford business as usual and warrants of a potential train wreck in the areas of personnel acquisition and poor structure. significantly it offer as real review of the global environment and maintaining and growing a

lionss will place increased demand on american power and increase in the military's force structure. with that in mind i'm supportive to identify low priority programs. if we can translate that savings into structure and modernization accounts, but we cannot be naive. what's the specific commitments if any, have you or the secretary received from administration that they will not attempt to harvest this savings for nondefense spending and they will appose any attempt by congress to do so and secondly, should you be successful in reinvested 100 billion over the next five years in accounts, how much more funding will be required to see sustained growth to 2-3 percent in these accounts and how do you propose to achieve this growth? >> the answer in the last

question first, mr. mack keeb. the hundred billion dollar number comes from what we think it takes to get from the one percent top line growth to the two to 3%. the force structure and modernization accounts. that's how that calculation was done. we have the support of the administration for the budget plan we've presented of one percent real growth and we've been trying get the support of congress. of course, we haven't heard the final bell on that yet. i guess i would come back mr. mckean and say the challenge here is that everyone supports our effort in general. supports reform in general, but has problems with each of the particular recommendations such as joint forces command such as deleting redundancy. i understand these are tough

decisions but if we don't make them, we'll not get the hundred billion dollars. >> well, you haven't given us any savings yet for jif con. you haven't done a business analysis to come up that. that was a military decision so to count that in the hundred billion is probably not - fair enough. before we submit the budget there will be savings coming from this initiative. >> we are - [laughs] okay. we're hoping there will be. we haven't seen that analysis yet. we're assuming at this point that there will be some savings generated. >> and it's fair to get that analysis before you judge it. >> that's what we would still like to see. thank you. >> as i understand it, you don't know how much you would save in efficiency by elimination of that command?

>> we don't have net number yet. we know it costs about a billion dollars to operate that command every year and we will eliminate portions of that. the headquarters and some of the other functions and that will save some money and we'll provide that analysis the business case analysis as we proceed this fall. >> as i see it, mr. secretary. somebody has to ride shotgun on jointness. i think that's given. the services - could very well, resort to stove pipe activities. without that joint doctrine being enforced one way or the other. that really worries me. >> let me ask general cart

write to comment on that. >> by the way fold water nickels almost didn't include your job but we got it. >> i'm sincere yay! appreciative. congressman, as we looked at this activity i tend to be much aligned and we've had many conversations about the jointnes and the incentives that drive us. we were clearly in need of getting more horse power in building jointness to the force when we moved to the construct of joint forces command. it was clear particularly in the areas of essential training, that the essential task list that we work with which we call military essential task list. these are the things that units use to train people and certify their people in their functionality. but they were doing it to

service medals rather than to joint. one of the first tasks when they stood up joint forces command. we had to have sufficient joint power and authority aligned and able to say, this is what we want you to do and to develop those joint operating concepts that we worked so hard on for the latter part of the 90's and the task listness to certify you in joint. about three years ago started transition the response to certify those to the services. because of the training activity and the essential task lists had been develop and were in fact demonstrating both through infrastructure the training ranges and capabilities they could in fact do this and would and saw the value in it. that's heart why we needed joint forces command and the fourth star to be there to drive this. not saying. the journey is done to joint,

but the hard work we put into building training regiments and building distributed modeling and simulation that bring th forcing together has by and large been accomplished. the question is how to sustain it and i agree, who is responsible and who gets up every morning worried if this force will stay joint? we're working through several courses of action through that it's going to be be somebody. somebody has to be accountle. we're working on that and have several options and we'll provide the committee with the results and an analysis we perform but at the end of the day i'm where you are. somebody has to get up every morning believing they're in charge of this. >> that's an excellent answer. however there should have been an answer, but there should have

been an answer in place before announcing to this particular command, don't you think general? >> you announced you were going to get rid of it and we'll find a replacement. come on. mr. chairman, we understand and we believe that when we looked at it's a joint chief's and made our recommendation to the secretary we could draw down from a four start command to some other general construct in the development of the business case and all of the other element office this activity. when we look at the full range of the courses of action. status quo is an option. it is an option we will fully investigate as to whether or not it's the option or not. but we're also looking at a full range from status quo to breaking down into agencies other commands and an assumption by other commands and divestture

completely. the full range is presented as we present options to the secretary. i do not feel because the secretary set an objective of eliminated joint forces command that option is removed from us in consideration. now quite frankly we believe we can produce this activity but it's still on the table. >> well, thank you for that. i hope you will keep in mind then services by nature will go back to the stove pipe doctrines of the past. and there needs to be - a joint activity to make this a continued success of jointness. mr. otiz? >> thank you mr. chairman and

secretary leib and carter and cart write. i know you have huge responsibilities and serious obligations, but as i said before, in the same boat, so do we. you know, and i think that the joint forces command - correct me if i'm wrong - came about because of the lessons learned. in the first person in golin th. we establish a base in there because of lessons learned in the persian gulf which was mind warfare. that case has since been moved and then been moved some place else and a human cost because where they moved did not have up for structure. this is why sometimes we're leery as to what is gone on all

this studies and you know, when we want to buy something. we know that we need it. the longer that we wait, the more that it is going to cost. but - you know, secretary gates statement that there will be a 10% reduction in service con tracks for the next three years. and my question is, 10% of what? what is everything being considered for the cut? historically, since i've been here, civilian personal have led to increased contracting out by huge numbers. what mechanism is being put into place to ensure that contractors will not simply be substituted for civilians? and i believe in contracting out. when it makes sense.

when in many instances it doesn't make sense and i would like to hear what your overall plan is to include operational energy as part of your broader review of efficiencies and also to hear what steps dod is taking now to get cutting edge technologys for the theater that changed the culture and to reduce our demand for this. i know i've given you three questions but any one that would like to tackle these questions. >> i'm going to ask doctor carter to address your operational energy question. there's quite a lot we're doing in his office but before i do that, let me answer your question on consultant. secretary gates had the same perspective you had. often when we freeze si vel yen personnel as in the past, it caused growth in what we caller is vice support contracts.

contracts that are basically providing staff augmentation to government workers. i'm not meaning people that do depo maintenance or functional responsibilities related to war fighting. these are staff augments and they have grown by a factor of three in the last five years. secretary gates thinks that was largely uncontrolled. at least not centrally directed. the reductions he's directing the 10% per year is intended to reign that back in to try and get some more sense of balance between government workers and service support contractors and we certainly need both. we cannot operate without contractors but we think we've gotten out of balance over the last 10-year and so we're work together restore that balance as we go forward and as we look to reduce overhead in the depth.

>> thank you. very important energy question and i'm delighted to say that finally, our director of operational energy, sharon burg was confirmed a few months ago. she's the seat now. very important role and - i give you a few examples of the kind of problems she's looking at. few weeks ago i was at bag ram er base at the fuel depo where fuel trucks come in and we basically buy at the gate paying $4 and 28 a gallon. not bad for fuel. much of which is trucked in from central asia through mountain passes and so forth. great example of a logistics effort to decrease operational energy at the operational end. down in the con da har area.

we're doing insulation of tint or te tenta ge there. we l have learned a lot and shes pushing that forward. congressman or tez talked about cutting edge technology to the theater if you read my directive to the acquisition workforce that issued a few weeks ago that i would put in the record. it says achieving these efficiency subscribe supply and demand your second highest priority. your first highest priority is to support the on-going wars. that is my charge to the acquisition workforce and you see inisr and everything we do making sure it's not just about buying. tomorrow's weapon system that's

efficiently and effectively and high end. but also about sporting conflict that's on-going. i wanted to make that point because i feel very strongly about it. >> thank you. >> doctor parkinson noted as british navy became smaller and smaller. the ad mirlty grew larger and larger. he also noted that an organization consumes with internal communication and the larger the bureaucracy grows the more of the energies consumed with internal communications and he noted, at some point. different point for different organizations, they become so large eventually all are done as communication and nothing gets

done outside. our defense establishment has notest scraped these inherent but rock razzies. it's very important to take a look and thank you for doing that. the question is, is the current suggest of doing away with joint forces command. problem could be solved by other means which we might need to discuss. is it possible to say this suggested cure might be worse than the disease? because this district is so impacted i would like to yield a balance of my time to randy forbes. >> i thank my friend from maryland and general, i thank you for being here, but i'm not going to ask you questions for two reasons. the first one is because we've basically seen hat this administration does to people in uniform that disagree with them and secondly. he was not completely forthcoming saying department was soliciting ideas about the

issues. what wasn't disclose supply and demand you put a gag order on the people doing this in the joint forces command where anybody that disgreece can't talk to congress or be here to talk about these issues. and mr. secretary, i ask you this question this morning. who do you serve? who do you work for? if that's the case, then you made the comment that president barack obama and secretary gates were supportive of these reforms, is it your testimony that president barack obama has signed off on the reform proposal to shut down the joint forces command? so then you misspoke when you said that the president and secretary gates. secretary gates proposal. the second thing i ask you is this. you said to the ranking member

that it was a fair question to get the analysis before you judge it. if that's the case. did the secretary get the analysis and if he got the analysis. why in the world won't you give it to this committee to look at it. let me go back and say this. this should be a debate as my friend from maryland said. whether or not we should shut down the forces command. we can't have that debate because you refuse to give us information. some of us may disagree. my friend from south carolina, texas, they all might disagree and think it should be shut down or not, but we can't have that debate because you refuse to give us evidence. the pentagon has woven a tapestry of silence that's deaf energy together the sounds of liberty itself. the end doesn't justify the means. you've had 11 years of testimony

out in the public and written analysis to look at for joint forces and joibt forces command, and you've had 90 days of back room and when you talk about meetings it could be two people talking with each other and talk about the 30 meetings but you refuse to give us one bit of the evidence and when you come in here and your blending apples and oranges and say it us no business case it was the business board we all first heard about the closure so that's making military policy. not business decisions and then on the first briefings that you came in you said you didn't know what the cost savings were. shouldn't you have at least looked at those before you made the announcement. we all know that sometimes you guys skom in and tell us all the money you'll save and it ends up costing us more money rather than saying and you say it's a philosophical decision but it's not to the folks losing homes

right now in virginia. to the 250 million dollar deal that didn't chose- last week because of your decision to the restaurants and businesses shutting up because you didn't make that decision. my time is up and i'll look forward to asking more questions when i get my own time. >> mr. chairman, i need to respond to a couple of those points. >> go ahead. >> first, mr. forces the recommendation the celebritying rer tear made and you correctly described it's a recommendation to the president. he's had extensive discussions with the president about that and all the recommendations he's made but with the regard to the establishment command the president has not yet made a decision. secretaries recommendation was not based on the defense business board. independent parallel activity that came to the same conclusion. the secretaries recommendation

was primarily with the military advisors were not meetings with one or two people in the room or meetings with the chairman, vice chairman. chief's and senior civilian advisors and with the commanders both incoming and outgoing of the joint forces command. with regard to the rational, this is a two part exercise. rational to recommend disestablishment was based not on the economics but military rational and i've gone into that in some detail and won't we pete it. i know your have another chance for questions and we'll do that then. the savings. there's a billion dollars and i'm sure we'll save a substantial part of that billion dollars and that's the business case and we'll provide that to the committee when we have it. we have provided the military rational for the recommendation

for closure. as a bot bottom line point it's particularly tough for the area around norfolk. we'll work hard to help that. >> mr. lynn, you have not done that. if you're going to work hard with them you could have at least taken their calls and given them information and you still stone wall us today but i'll ask in a moment. >> i met with the governor as well as yourself yesterday morning and will continue to do that. >> mr. taylor, please? >> with your permission i'll yield my time and claim his time when it's his turn. >> thank you. mr. taylor for yielding and thank you, chairman for holding this set of hearings. secretary lip you said this is

not a civilian decision. i disagree. i agree with colleague forbes that said if the end boils down to a decision made by a president on a recommendation by the secretary. just talking about the military side of things. i want to read quickly a quote from former commander at jif con that said i disagreed with the secretary of defense and jointness of military has been achieved and the job is done. abandoning a long defense and chairmans of the joint chief's of staff to ensure maximum effectiveness. side from hearing from general cart write yesterday morning. this is the only other military expert we've been able to hear this thoughts on the issue. i think it's fair to say, that there is some disagreement or different points of view on the military side here.

we understand at some point we have to come to a decision. i accept that. i strongly share chairman cell on the and ranking members secret nature of the discussions in the defense department on this issue. particularly on something that that is kind of impact that potentially disaccomplishing a four star command could have. i potentially get the feeling the department doesn't believe there's a role for congress in this decision given the fact the recommendation has been announced. i'll concede the point today - i think we're moving the forward actually. you have said that you agree an analysis needs to be done and that's, i'm talking about what disestablishment over command or any other route would cost or save. what this specific effects would be on the military and how we would ensure to carry out the important functions that even

the secretary said he knows jif con does. there's important functions that need to be carried out. what i'm concerned about is the fact that the secretary has made the recommendation before the analysis done that even you have said to today is where to go today. what i want to ska you, is if you'll committee to including us, not just as a committee, but the virginia delegation and the governor has made many efforts do that if you will make a commitment to arrange that meeting to allow the input in the analysis you describe before implementation would go with this proposal. >> thank you. as we discussed yesterday morning directly with the governor and yourself and other members of the delegation, we will, indeed ensure that the governor and elected members of

the virginia delegation have an opportunity to meet with the secretary some time this fall before final decisions are made on implementation and we'll solicit your views in open and make sure we have a channel that the information that you think needs to be before the department, before we made that decision indeed is before the department. >> well, i appreciate you saying that and i appreciate your recognition that we should have a role in the process. i have to say i'm unhappy with the performance in terms office involving us in that discussion. i will say, i'm happy to note now you have offered to include us more rigorously in the analytics before any decision is implemented and i thank you for that. i want to close by saying, and reminding the other members of the committee and i think you've had an opportunity to far to beat a flavor where the committee is on the decision-making process here. reminding the proposed closure

of joint forces command presents based an number given by the department previously. only one quarter of one percent of the secretaries plan to rean a hundred billion in defense priorities and as we provide oversight for the secretaries demand we'll demand cost-benefit analysis of those decisions because it's our job to provide that and it's also our job to our constituents back home to ensure a large brush doesn't sweep away thousands of jobs without proper justification and rational. with that, i yield back. >> thank the gentleman. let me, let me say mr. secretary that i am deeply concerned that the years of creating the joint culture - and enforcement there

of - can go down the river. and be lost. as long as i'm chairman i'm going to do my best to make sure that culture stays and it's enforced. it's coming too much effort, not just by congressman but by so many outstanding leaders who wear the uniform. they've made it happen and i don't want to see that slip away. and if i have any message for you, mr. secretary, i hope you understand that. >> i do understand it and share the objective mr. chairman as we discussed we're not sure that's the right conduit was appreciate that there may be differences about that. >> first of all, i'd like to request. unanimous approval to submit to the governor of virginia.

statement by the city of suffolk also questions that we have requested to be asked by the department. >> without objection. >> mr. chairman, also have enormous respect for you and one of the things that fright energies me about secretary lynn's testimony. he doesn't believe there's a risk to going back to the pre fold water issue. might not be concerned with the cost of the common wealth of virginia. i don't expect members here to be concerned but number one news story on the day. announced in the communism chinese press. was the closure and how it would help them. they're number one weakness with the russians working is jointness. secondly. it's coming to a theater with you if they can do this process here and not have any opennes they'll do it anywhere across the country. third, we sent a message out to all of our partner as cross america, you better be careful

when you deal two department of defense because don't count on them being open and having a process if they just decide to close something they'll make that decision and get the analysis later. i wanted to go back to what i was talking about mr. secretary with this cloud of lack of transparency that you guys have pull down the drapes in the pentagon. last year and i understand why. we haven't really as a committee held you accountable to that. last year you issued a gag order that prohibited individuals at the department of defense from talking to members of congress about the ramification of some of your cut. we had hearings cancelled because people couldn't come here and testify and what did we do about? it this committee did nothing. when you refused the requirement you have by law to give a shipbuilding plant to know what you were doing and asked you in every way we could and you refused to do it? we didn't do anything. required by law to give us an

aif yous plan and we ask you and ask you and you just failed, we didn't do anything about it. you've had 11 years of testimony and now you make 90 day of [back room meetings? what do we do about that? you wouldn't respond to members of con grechts senate and republicans and democrats and my friend, congressman scott has been right with us, asking on this having same problems we've had. governor of virginia went 7 weeks and wouldn't even return this telephone calls to say hat you're doing and how. yesterday at the meeting with us, you wouldn't let the press come in. we ask you to and you took our telephone as way and there wasn't any classified information or anything that had executive privileges was you don't want the pub rick to know some of this information. you issued a gag order of refusing to let them talk if they have a counter opinion to

yours. one of the questions i a have for you today is will you give the chairman a rankinging copy of the order you made them sign. nondisclosure agreement today. at some point in time. mr. chairman. enough is enough. we need the analysis and we need effects. i think this the time. mr. chairman and mr. ranking member, we so respect both of you but today we'll send you a letter signed by democrats and republicans. and not just people from virginia, requesting that we have backed up. drawn a line in the sand and said please give us this information and you've refused. we've backed up again and you've refused. we backed up again and you refuse and mr. chairman, mr. ranking member, we're going to request if they keep pushing us against this wall the committee issue a subpoena requiring this information be fwin to us because i think it's right for the american people and mr. lynn

i'll close by saying this. you may work for the president and maybe for the secretary of defense but you work for the american people. they pay your bills and send their sons and daughters to fight our wars and they have a right to know this information and we ought to be able to give the analysis and put it in on the table. we can't afford to go back and we need to not come with our hat in an and pleading for crumbs of information. we out to be able to come and you give us analysis and information so we can do the due ginls we can to have an over site function to protect the greatest military the world has ever known with. that i yield back the balance of my time. >> thank the gentlemen, doctor snyder. just a couple of things.

thank you mr. snyder. mr. forces the one thing we're greed on. i do work for the mesh people. what i said in response to your answer and i hope you weren't implying i said something else. just on a couple of the factual points we have provided the committee with that and the aviation plan. i know the committee would have liked it in the first month or two of the administration stravenlths we didn't have people confirm and provide it when we built it. there was no plan when we or you requested it and we provide it now to the committee. >> mr. chairman. i like to hear what mr. chris a had to say. i'd like to balance the yield of time to mr. chris. >> thank you mr. chairman. i obviously had questions but after listening to mr. forbes

testimony, you know i go back to the briefing we received saying dod indicates some analysis was done leading up to the decision to eliminate the plan. the plan will be developed over the upcoming year and it's frustrating because if your working together in good decisions being made, certainly we'll agree obstacle them but i think i can understand the frustration is if we're not included any decisions but we're in the authorizing committee it gets die see as to what we support and don't. are we working together for the american people? but, quickly. my question would be, you know going back to 1993 when president clinton and vice president gore came in they re-invented in government and a lot of pentagon employees were eliminated over that time and most of that was sucked up into contractors but during that

time. the o and m budget stayed consistent with inflation. it's been the last 10-years though that it's been pretty extensive how it's grown. so my question to you is that when you're looking at the shrinking of the defense department, are we shrinking on o and m or procurement? what's the split on how that's going to be addressed? >> the focus of the secretary's initiative is on what he's described as overhead. now much of the overhead is in the, o and m account but not all of it. so, we've asked the services and all the defense agencies to put forward proposals to develop 100 billion in overhead cuts. and to shift those resources into the war fighting accounts. that will probably lead to some restraint in the growth of the, o and m accounts but how much i couldn't tell you right now.

>> there reasonably no general idea that 90% of it is coming out of o and m and 10% out of procurement. there's really no idea? >> focused on over head. we'll evaluate the specific proposals and it'll fall in the budget. >> so when you're looking forward to cut your budget. where does the future combat system fall in this debate? >> the future combat system is an army modernization for the fleet of vehicles. the secretary restructured that last year feeling that it was not focused sufficiently on the lessons that we'd learned coming out of combat in afghanistan and iraq mrafrly with respect toiuds. the lead slaement ground combat vehicle probably the first element out and mr. carter can go into more detail on that if you like.

>> we just saw the ground combat vehicle, there's going to be a rebiddings. that part of the savings we're looking for going forward or what is the plan here? >> with respect to the ground bomb combat vehicle. one of the elements the rfp. the army issued several months ago. we have pulled back because it did not contain the right acquisition strategy. i think that the intersection of, ground combat vehicle and the efficiencies that initiative lie in the area that idea scribed earlier at particularly the affordability as a requirement idea. so as we look at the ground combat vehicle just like the navy has done as army looks at the ground combat vehicle we're looking at each element of the design. all the drivers of the design.

internal power. the number of troops that the vehicle can carry. the hardness of the vehicle. a gunnery and so forth. and looking at the way in which each of the requirements drives cost and making sure that we're making the right trade-off. that is, at the point at which we're getting a diminishing return of military capability for continuing investment that we cap the requirement at that point. doing that for each of the design perimeters on the vehicle and there by getting well-rounded overall design. so that the vehicle that we put out in rfp-4 for the technology development phase is the one the army can actually afford when it comes time to buy it. 7 years to first production vehicle and an appear i don't haved o production. look out and say what else will

they be doing? they'll be doing light vehicles. heavy vehicles in addition to this armored vehicle they have other investments to make and we want to make sure we're building one that's affordable while having military cape biment they want. the savings on that will be you can think of in two categories. one is that it may be that the resulting design is one that allows us to spend less over the next five years than we originally had planned in which case that's savings that can be part of the 100 billion but i think for that particular project the body of the savings will be in the out years when it comes time to design or to procure a vehicle that's better designed for affordability than would have been the case if we followed it four months ago. >> chair organizers gentlemen

from texas? five minutes. >> thanks for being here this morning. talk about something besides joint forces command. the - my antenna went up when i heard secretary from august ninth that secretary gates is scheme was to cut overhead and back off this and those kind of things in order to an adjust the numbers and the business transformation agency and,ni as well. explicably worthless and on the chopping block for this 100 billion dollar nut. couple of questions. did you come up with a 101 billion as a goal or did you build one from the bottom up and got to the hundred billion? how does eliminating all of that back off asbta and others have

you look me in the eye with a straight face and tell me you're just as committed to getting audible or audit financial information as you were before this happened. looks like you've take ten team on the field to do that and said, they were not going to get there. my question is that to the issue is one, do you think telling the american people. the confidence of the taxpayers. you mentioned earlier is helped or hurt by the department of defense having audited financial statements. is the department able to say your money is being spent the way we think it should or just trust us? we don't need audits. we're the single largest entity on the face of the earth from a spending standpoint and they're not needed. trust us we'll spend this money. how do you defend the law that none of you are be here when